| (7) Receipts from cover charges, door charges, entry
fees, or admission fees that are for entertainment, food specials,
and other purposes, and receipts from the sale of temporary membership
cards. Sales tax as provided by §3.298 of this title (relating
to Amusement Services) is due on these receipts.
(8) Bad debts. For more information on bad debt refunds
or credits, refer to subsection (n) of this section.
(9) Mixed beverage sales taxes. Mixed beverage sales
taxes are not part of the mixed beverage gross receipts tax base.
A permittee who sells mixed drinks with mixed beverage sales tax included
in the sales price should deduct the mixed beverage sales tax before
calculating the mixed beverage gross receipts tax base.
(g) Alcohol loss. No mixed beverage gross receipts
tax is due on alcoholic beverages destroyed due to spillage or breakage.
(h) Inventory for cooking. No mixed beverage gross
receipts tax is due on alcoholic beverages used in cooking.
(1) Purchases. Purchases of alcoholic beverages used
in cooking must be documented either:
(A) by purchase invoices that have such beverages clearly
denoted by either the seller or purchaser; or
(B) by separate purchase invoice.
(2) Storage. Alcoholic beverages used in cooking may
be stored with regular bar stock or in a separate storage area.
(3) Use. The withdrawal from inventory of alcoholic
beverages used in cooking must be recorded at the time of withdrawal
on a service check or other permanent source record. Use tax as provided
by Tax Code, Chapter 151, is not due on alcoholic beverages used in
(i) Mandatory gratuity charges.
(1) Reasonable mandatory gratuity charges are excluded
from the mixed beverage gross receipts tax base if they are:
(A) separated from the sales price of the alcoholic
(B) identified as a tip or gratuity by any reasonable
means, including such terms as service fee or service charge; and
(C) disbursed to qualified employees. Any portion of
a reasonable mandatory gratuity charge that is retained by the employer
is included in the mixed beverage gross receipts tax base.
(2) Mandatory gratuity charges in excess of 20%. If
a mandatory gratuity charge exceeds 20% then the entire mandatory
gratuity charge is included in the mixed beverage gross receipts tax
base regardless of how the gratuity is disbursed.
(j) Record requirement. Records required by the comptroller
for mixed beverage permittees must be kept for a minimum of four years
and throughout any period in which any tax, penalty, or interest may
be assessed, collected, or refunded by the comptroller, or in which
an administrative hearing or judicial proceeding is pending. Records
must be made available upon request within a reasonable time for examination
by the comptroller or authorized agents or employees. The records,
in general, must be contemporaneous and must reflect the total gross
receipts from the sale or service of alcoholic beverages and those
associated services that are subject to the gross receipts tax, as
provided by subsections (c), (d) and (e) of this section. Records
may be written documents or their electronic equivalents. Permittees
must contact the Texas Alcoholic Beverage Commission for information
concerning Texas Alcoholic Beverage Commission record keeping requirements.
(k) Source records.
(1) The information described in this subsection is
required to be printed on a source record in a manner that makes such
information clearly evident or by a system of symbols (codes) if such
symbols and their meaning are printed on the source record or maintained
on the licensed premises.
(A) Each individual serving of an alcoholic beverage
and the price charged. When using service checks, it is permissible
to make one entry on a service check for more than one individual
serving if all of the servings are of the same type (e.g., 3 Scotch &
Water @ $2.00 = $6.00). If all of the servings are not of the same
type, a separate entry must be made on the service check for each
type of service (e.g., 3 Scotch & Water @ $2.00 = $6.00, 2 Rum &
Coke @ $2.00 = $4.00). When using a cash register only, regardless
of the type of service, each individual serving must be rung up separately.
When using a combination of service checks and a cash register, it
is not necessary to itemize each serving on the cash register tape
if all the required information is shown on the service check.
(B) For an alcoholic beverage not served as an individual
separate serving, the unit of the serving used and the price charged.
When using service checks, units of servings that are more than an
individual separate serving shall be recorded as such (e.g., 2 pitchers
of beer @ $3.25 = $6.50, 1 pitcher of daiquiri @ $6.00 = $6.00). When
using a cash register only, each unit of serving which is more than
an individual separate serving must be rung up separately, with the
price list identifying the unit of serving. When using a combination
of service checks and a cash register, it is not necessary to itemize
each serving on the cash register tape if all the required information
is shown on the service check.
(C) Each separate serving or other unit shall be clearly
identified as to the kind of drink (e.g., daiquiri, tequila sunrise)
or class of beverage (e.g., beer, wine, whiskey). If a cash register
does not have sufficient keys for the classification, the price list
used for identifying the units of servings must also identify the
kinds of servings.
(D) The date of the transaction. For this purpose the
"date" begins as of 3:00 a.m. one day and continues until 3:00 a.m.
the next day.
(E) Complimentary alcoholic beverages, which shall
be recorded on service checks only. A check must be prepared for each
individual or party served. The check should be prepared as if the
service of the complimentary alcoholic beverage was a normal sale
and then clearly marked as being complimentary. The service checks
should be grouped daily and filed with the daily summary showing the
information on the summary as required by subsection (l) of this section.
(F) Mandatory gratuity charges that exceed 20% of the
charge for alcoholic beverages must be recorded and identifiable on
a source record. A reasonable mandatory gratuity charge must be recorded
and identifiable on the source record only if the gratuity is disbursed
to recipients other than qualified employees, including, for example,
owners, club managers with no direct involvement in the particular
event, janitorial help, chefs, cashiers, and dishwashers. Voluntary
gratuities are not to be recorded on a source record.
(2) Source records shall be maintained in sequence
(l) Daily Summaries. Each permittee must maintain a
daily summary that includes the following information:
(1) all information required to be recorded on source
(2) complimentary alcoholic beverages dispensed, showing
the number of services, type of service, kind of drink, and normal
(3) alcoholic beverages that were lost through theft,
showing the number of containers lost by size, brand, and class. The
theft must be reported to the proper police department and must be
substantiated by the report of such police department;
(4) alcoholic beverages that were lost through a disaster,
showing the number of containers lost by size, brand, and class. The
disaster must be reported to the comptroller;
(5) alcoholic beverages that were lost through breakage
or spillage, showing the number of containers lost by size, brand,
and class or type of drink and size. A written report must be prepared
at the time of the loss;
(6) alcoholic beverages that were lost through the
cleaning, servicing, or repair of dispensing equipment lines, showing
the amount lost by class or type of drink and supported by:
(A) reports prepared by the permittee at the time of
the malfunction; or
(B) repair/service invoices prepared by the repair/service
(7) alcoholic beverages taken from inventory for use
(8) cover charges, door charges, entry fees, or admission
fees. Cover charges, door charges, entry fees, and admission fees
are subject to sales tax as provided by §3.298 of this title,
unless the Texas Alcoholic Beverage Commission determines that the
cover charges, door charges, entry fees, or admission fees collected
are in violation of the Texas Alcoholic Beverage Commission rules
or regulations; and
(9) information pertaining to changes made during the
month concerning prices, glass sizes, bulk machine (e.g., margarita
machine) recipes, ounces per serving, parties, or promotions.
(m) Purchase invoices.
(1) A record of all alcohol and alcoholic beverages
purchased or received showing the date, the name and address of the
person from whom purchased or received, the location from where shipped,
the location received, the quantity and kind of beverage (brand and
class) received, and the total price paid for each brand and class
(2) Alcoholic beverages used in mixing drinks as the
secondary ingredient (e.g., vermouth, triple sec) must be supported
by purchase invoices which have such beverages clearly denoted by
(n) Bad debts refund or credit.
(1) A permittee may take a credit against taxes to
be paid to the comptroller or claim a refund on taxes paid to the
comptroller for bad debt on sales.
(2) To establish bad debt credit or refund, a permittee's
records must show:
(A) date of sale or service;
(B) name and address of purchaser;
(C) source records of sale or service;
(D) evidence that the gross receipts tax was paid to
(E) all payments or credits applied to the account
of the purchaser;
(F) a designation that the account is a bad debt; and
(G) evidence that the account has been or will be claimed
as a bad debt deduction for federal income tax purposes.
(3) To determine the amount of bad debt allowance for
tax, all payments or credits in reduction of a customer's account
must be applied ratably between alcoholic beverages and other goods
sold to that customer.
(4) If all or part of the amount claimed as a bad debt
is later collected, the amount collected must be reported as a taxable
receipt in the reporting period in which the collection was made.
(5) Accounts may not be labeled as a bad debt for the
purpose of delaying the payment of the mixed beverage gross receipts
(o) Audit and examination of tax account.
(1) Determination of tax liability. In examining the
tax account of any permittee, the comptroller may compute and determine
the amount of gross receipts tax liability based on reports filed
with the comptroller, records or information obtained from the permittee,
records or information obtained from any seller who furnished alcoholic
beverages to the permittee, or such other information as may come
to the attention of the comptroller. The comptroller presumes that
the disposition of all alcoholic beverages purchased by the permittee
is taxable until established otherwise.
(2) Access to all information. The comptroller may
examine all books, records, papers, documents, supplies, and equipment
of a permittee. Additional records that may be required to be presented
include, but are not limited to, the following:
(A) all procedure and operation manuals;
(B) all financial ledgers, journals, and registers;
(C) all financial statements prepared internally or
by an outside bookkeeper, accountant, or certified public accountant;
(D) all bank statements;
(E) all federal income tax returns; and
(F) all state and federal employment tax returns and
(3) Failure to maintain or make records available for
audit. In examining the tax account of each permittee, if the comptroller
finds that the permittee has failed to maintain or make available
the records required by any regulation of the comptroller, the comptroller
may compute and determine the amount of the gross receipts tax liability
from any available source or records, and estimates of the tax liability
may be made by use of any available records for any period for which
the permittee has failed to maintain records or file a report with
the comptroller. In the event records are not made available, the
comptroller will presume all alcohol purchased was sold. In the absence
of records or evidence to the contrary, the comptroller may accept
an average pour figure of 1.25 ounces per serving of liquor.